Search

01/30/2013

More People Get Option to Convert to Roth IRAs

It’s no doubt that the Roth IRA
is a favorable option to many people when it comes to retirement planning. And after the fiscal cliff deal, the Roth IRA
just keeps getting better and better for more and more people. How do you know whether
it is right for you?

Essentially, the Roth IRA
reverses the normal IRA by requiring that you pay the income taxes on money
deposited in the account up front when you deposit them instead of when you
withdraw the money later. Also, in addition to no income taxes when withdrawn,
with a Roth IRA you have no Required Minimum Distributions (RMDs) later on.

The fiscal cliff deal lets more
people, and those of lower incomes, convert their IRAs into Roth IRAs if they
settle the tax burden up front. This can help with estate planning for their
loved ones, too.